we are life at bloomberg world headquarters in new york, covering stories out of san francisco, washington and south africa. concerns about fed tightening and ecb tapering hitting the bond market today. more investors anticipating a rate hike in december after comments from charles evans. oil is climbing, approaching $50 a barrel after data showed u.s. crude stockpiles dropped for a bit week in a row. jack dorsey took the reins of twitter a year ago but many of the problems he was brought in to fix are still there. we look behind the scenes of the company as buyout chatter grows. julie hyman joins us with the latest. stayingtocks

steady today, near their highs of the session. look at the refiners in particular. ofre is a shutdown refineries in the caribbean because of hurricane matthew. we have oil prices higher as well with that inventories report that vonnie alluded to. we've been watching department stores as well today. sales may grow at a faster pace than last year because of rising wages, because of a stronger job market. increase in spending during the holidays come excluding things like gasoline and restaurant sales. you have retailers higher today. wheat also been looking at today.

wheat investors are focused on where to hide. end,ycle is going to rising yields and the treasury market not helping these guys. coming full circle back to the hurricane, lumber futures up 1% inay as a lot of folks florida battened down the hatches here in anticipation. lumber prices going higher. david: thank you very much. let's check in on the first word news this afternoon. her: hillary clinton at washington home preparing for the second presidential debate. john podesta told reporters that the town hall setting is a natural format for her. format that a

donald is not as used to. mr. trump has hinted he may releases 2015 tax return. the wall street journal reports that trumps comments were reported by nbc after last week's presidential debate. he said he would release his current returns as soon as they are completed. leaders from nearly 70 nations have pledged more than $15 billion in aid to war-ravaged afghanistan over the next four years. nearly as much as the corruption plagued government was promised in 2012 during the tokyo donors conference. the eight comes at a critical point in afghanistan's battle against the taliban. cars isof self driving driving another goal in the u.s. -- zero traffic deaths in the next 30 years. inreased seatbelt use

addition to campaigns against drunken and distracted driving. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. vonnie: global investors are greenspan-- alan shared this view earlier on bloomberg radio. down at cannot stay levels -- theyd will move relatively soon. wholly independently of a central-bank policy. vonnie: this is evident in the earlier,action -- jeffrey rosenberg explained the so-called mini paper tantrum. -- taper tantrum. 'sffrey: around bernanke

talk of tapering, the memories are being reignited here. there's a lot of misunderstanding about what's going on around the ecb's conversation around tapering. it's a testament to how fragile markets are to any signs of changes in monetary policy support. jon: you wonder how deep this whole is now. no one is pretending for one moment the reason bonds across the eurozone are trading in their territory is due to the magnificent credit quality -- in the credit space, perhaps even more so. the disconnect, does that mean the banks have to keep on digging whether they like it or not? jeffrey: it's part of the policy

prescription. if you're going into quantitative easing, you will extend that into corporate bonds for the explicit purpose of try to benefit into the real economy the pass through of further accommodation. markets will anticipate that. it will be hard to unwind that without seeing some kind of volatility in market prices. look at the price of credit after the announcement of the expansion of the corporate bond purchase program. first, it was surprising to the market. any attempts at unwinding these degrees of policy intervention are going to require a lot of communication if they are going to avoid disruption. ,: you've got goldman sachs jpmorgan, even deutsche bank looking at 2.5% yields and the

outlier call saying what .35% at willnd of 2015 -- things not change, balance sheets will stay quite large. where you fit? jeffrey: a lot of it is conditional. at hsbc ande's view some of the other views, clearly the other views towards higher interest rates are talking about a continuation of what we know today. with the fed is saying is as long as things proceed on the path as we see them today, the fed will normalize. that's where you get the higher interest rate forecast you cited. we have seen significant time a surpriseain with to the consensus outlook because some other event has occurred that has tripped up our consensus expectations that as long as everything proceeds as

is currently the case, we will raise interest rates in december. we can all guess what that surprise event might be. there's a lot of potential offense that can certainly disrupt that consensus view of a march towards a hike by the fed in december. there are no issues that undermine the current level of interest rates. you can see both scenarios play out there. alix: morgan stanley straight is by u.s. 10 year treasuries and tenure -- 10 year bunds. jeffrey: the view is a problematic one. what we got yesterday was a misinterpretation. eventually, the ecb will have to describe and discuss how they will exit their qe policy.

the next form of communication will not be that one, it will be a very different one. it will be an extension of the qe program and how the modality of that program will need to about. does need to evolve. when it comes to expressing the shift in monetary policy come our favorite expression is going back to the shape of global yield curves here. despite what the levels might be in terms of qe on, qe off, what we are seeing is a change in how qe is being implemented. you are seeing that in the case of the bank of japan. you will have to see that also change in the case of the ecb. we see global yield curves steepening. that is our best expression. vonnie: that was jeffrey rosenberg speaking earlier on "bloomberg ." david: nicky newon-king will

join us, next. this is bloomberg. ♪

vonnie: this is "bloomberg markets." david: time for the bloomberg business flash. meet the doj in court -- working on a settlement regarding the mortgage backed securities. serra says the bank should settle between $4 billion and $5 billion. another step taken today by jeff companyose exploration

conducted a safety test of its that they plan to send crews and sell seats to $250,000in 2018 for -350,000. vonnie: let's put the spotlight on south africa. meetingnce minister with investors in new york this week. making the case that south africa is open to business despite ongoing political turmoil. he made his investment case in an interview with francine lacqua. avin: we've had huge inflows into the bond and equity markets in south africa. at the moment, foreigners own over 35% of even our land denominated bonds as well. joining us now is the

ceo of the johannesburg stock exchange, nicky newon-king. thank you for joining us. tell us about the political risk in south africa. is down 1% that is a lot to do with the rand. nicky: also with global markets. we have a strong, vibrant, noisy democracy. that contributes a bit to some of the turbulence. we have extremely strong institutions, very critical minister of finance, very critical independent reserve bank. vonnie: you are meeting with investors in new york. what's the case you are making for them to take more business to south africa? nicky: you have these robust institutions, very strong rule recognized by the

world economic forum five years in a row. investors don't have to worry about investing there. they can just choose the stocks to invest in. vonnie: why would somebody invest in south africa if it's not clear that he will be the finance minister or whether jacob zuma will stay on as pie minister? -- prime minister? nicky: the minister of finance minister --revered you can see the number of corporate traveling with them today. in emerging markets, they are used to political turmoil. in america, you have your own turmoil. is the credit downgrade something that concerns you? nicky: no good comes from a credit downgrade.

we are highlighting the strength of the institutions. we will have to navigate whatever the rating agencies throw at us. you have government and labor working together on these issues. that is something the agencies are listening to. it's also about the investor base. it's all about building credibility. perceiveow do you business to be going forward given that we don't know what's going to happen central-bank wise and with the rand? nicky: we are used to navigating south africas -- is highly regarded from a management perspective. you see a lot of business

becoming proxies for the african growth story. investors are looking at what are the other growth opportunities you can access through south africa. david: you've been working to prevent the creation of alternative exchanges. why is that? nicky: we are a relatively small economy. the world's 18th largest exchange. depends on what the rand is doing. you have to ask yourself whether the complexity of a fragmented market can be sustained in an economy that size. we don't think so. competition is introduced, you want to make sure you have level playing field and you manage systemic risk. what one doesn't want to do in opening it up is bringing too much uncertainty for investors. be wrong withould

having a second or third exchange operator? i know you appealed granting license to one. nicky: it's more the basis on which exchanges are allowed to operate. you want to make sure the policy properly investigated and publicly discussed. those have yet to be discussed in south africa. when they are, we will be happy to complete -- vonnie: the reaction from investors in new york -- we spoke with one of the largest lenders. he said they were stopping lending until the situation is clarified. have you seen much of that? nicky: not expressed like that. -- theys are looking to have not focused on the minister

as an individual. vonnie: thank you for joining us. why he's hoping the treasury department will help them avoid criminal charges. that's next. this is bloomberg. ♪

david: you may have never heard of -- he is wanted on criminal charges in greece and is currently hiding out in maryland. we spoke with matt phillips about this story. how did this unknown in economist come to get a very big job in greece a few years ago? >> this guy spend most of his career working as an of security economist in washington.

in 2009, as he was watching the european debt crisis unfold and his home country of greece was at the epicenter, he felt the desire, the patriotism to apply to a job that had been posted, they needed an independent statistician to scrub the country's economic statistics and six years later, he got the job in 2010 and sixers later, rather than being seen as a hero who saved his country's economy, he is vilified as public enemy number one there carol: he applied online and got it. when he went to greece, he started going through the data and found a lot of problems. matt: tons of problems. for years and years, greece had been cooking their books, making

their debt look smaller. their economy look better. it did not come to light until everything started to fall apart in 2009 and 2010. when he found was pretty egregious. things were kept off the books, things were completely misstated , there were lots of entrenched interests to keep this secret. what weno, this is not are going to do, we have to be overt about this. i will not give authority to the board of the state statistics authority. released them, the eu never had a problem with his stats. they had lots of problems with his predecessor's statistics. david: it's a five-year term.

by the end of it, he is carrying a gun to work in a briefcase. , heithin a month or so noticed his e-mail was being hacked, he was getting death threats. he's a black belt in jujitsu. this is not some shrinking he's a large man, a black-and-white kind of guy in that things are right or wrong. the fact that he felt endangered physically and felt he could not be in the country anymore says a lot about the pressure he was under. vonnie: he was in charge of the greek statistical office. there was a board that oversaw it. they were upset that he put out information before they okayed it. isn't that the whole idea? this is what got greece into trouble in the first place. matt: that's right. you wonder why they okayed this to begin with, what they expected to happen.

they got the right guy for the job. there are a lot of entrenched interests who felt otherwise. .avid: that was matt phillips you can read that fascinating profile in the latest issue of "bloomberg businessweek." vonnie: breaking news on booz shares downon -- 3.5%. one of its contractors is accused of stealing classified u.s. government documents. the contractor was arrested back in august and subsequently fired by booz allen hamilton. they had also employed edward snowden. oil climbing towards $50 a barrel. 2.5% now. supplies falling for a fifth week. $58 --as been well above

during the crucial level -- the dollar index is down slightly. still showing much strength in the last few days. david: the dow up about .75%. the s&p 500 up .5%. this is bloomberg. ♪

vonnie: this is "bloomberg markets." commodity markets are closing in new york. let's have a look at the big movers today, starting with

metals, gold trading much more subdued after yesterday's pretty volatile selloff. at 1259ures trading .10. --ong demand from automakers down 3.25%. orange juice futures giving back some of the recent gains. forecasters watching the path of hurricane matthew as it approaches florida. .4%.es down numberchart library, 4043, oil climbing near $50 a barrel after stockpiles fell for a fifth week.

crude inventories were down by 3 million barrels. you can see oil prices rising. at theterest in futures same time it is rising as well. futures is the blue line -- the bti futures is the blue line -- wti futures is the blue line. david: joining us is caroline abramo. let's start with the hurricane. the latest forecasts indicate this will be spinning off to the east. folks in the oil industry breathing a siam relief -- sigh of relief. caroline: you look at natural gas and oil -- this time, the storm is not veering in that path. it is much more nuanced.

at natural gas, we see demand going down when you have a hurricane and exports decreasing, which has a dampening effect on prices. vonnie: let's have a quick look at the be mapped. if you want to look at the actual storm, you can map it. at the very worst them it will delay three days, but the supply will eventually get there. what is the main impetus behind this move? caroline: we had the opec move. the deal is real. where you see that sticking power in terms of cooperation, it's been supportive of prices. you've also seen the fifth straight reporting of crude inventories being down. a lot of the market is

scratching their head and saying, what's going on here? all indications are that we still have a lot of supply. as we get towards $50, producers are incentivized to produce. producers likest russia and opec will put more supply on the market. here, we have a deal there are still about two months until november 30. is there any chance this could fall apart? caroline: we saw open interest. at the highest levels since 2013, the highest levels we've ever seen. the market is very long. we have supplied that could come on the market. rig count is starting to tick up. people are talking about crude

moving out of storage and you see the refining process on vessels which means it is still here. vonnie: the bloomberg commodities index, we are seeing it pick up again now. caroline: base metals has been a great performer. -- theas continued number one commodity year-to-date. to your question about the we see those gains continuing, things are shaping up to look good to the end of the year. today, jeffier curry was on bloomberg surveillance. crude oil struggled to rise above $50 a barrel.

>> if you start to see a stronger dollar, that will put downward pressure on the cost structure and downward pressure on oil from a macro perspective. when you look at it from a micro perspective, you still have a lot of supply out there in the market. the three big places, nigeria -- libya adding more supply second, we have a wall of supply. spot of coming online is next year. the third one is low-cost russia.like sovie slowing.is what is the man coming from china and india? jeff: demand growth from 2010

has been bouncing around -- it has basically been a flat line. china,een a slowdown in it is not growing at the same rate it was in 2009 and early 2010. there's not a story in demand. that underscores a broader issue facing not only the commodity markets but in terms of looking at the global economy. domestic demand is relatively stable. what we have going on in these different markets is an investment problem. >> what is the risk of one of these companies cutting back to much on investment? 10 years now, we see oil should back up to $150. that is the thesis when you think further out. the sooner we can get to that 2020, probably 2019 or when you look at the overall increase in supplies, the sweet

spot is 17, 18 and then they start to taper off in 19. we haven't talked about the other source of supply, shale. that's the one that responds when you get into that $50 a barrel rate. >> how much do we understand about how many producers are in shale? do have a better grasp than we did last year? jeff: you can separate them into three buckets. fordpermian basin, the eagle and the boaken. the permian guys are becoming competitive even against the an-cost players on

international basis. cuts, they will see a market share from opec me go into 2017. tom: when do you know which way it will break? are you waiting to see price or some other indicator that will tell you about 50 do dollars or above $53?- $52 or jeff: producers come in and sell that market. their economics are in that $50-55 -- they have drawn a line in the sand at 50. you get into that 55 range, the marginal guys -- it is hard for this market to go above 55. vonnie: let's check the headlines.

a federal government contractor has been accused of stealing highly classified information. announcede department a criminal complaint against harold martin of glen bernie, maryland. he's been in custody since a court appearance in august. it would be the second time in three years that an nsa contractor stole classified information. a day after his debate with tim kaine, mike pence is back on the campaign trail. he attended a rally in harrisonburg, virginia. he won bipartisan praise for a calm and collected performance. forced a matthew has postponement of the election in

the storm slammed into haiti with 145 mile-per-hour winds, killing two people. one person is reported missing. the paris agreement on climate change will go into effect in 30 days. ratification of the accord by nepal, canada and seven eu nations surpassed the number required for the pack to be adopted. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. this is bloomberg. vonnie: coming up, tim kaine and mike pence faced off last night. we will look at the performances and if they changed the political landscape, next. this is bloomberg. ♪

david: mike pence is back on the campaign trail, attending a rally in harrisonburg, virginia today. pence 10 plus for a calm and collected performance but tim kaine is claiming mission accomplished -- joining us now is sahil kapur. let's talk about what the objectives of these two candidates was last night. tim kaine's goal was to put mike pence on the fence comments that have been seen as inflammatory. this is where tim kaine succeeded even as he failed on style points, as he was seen as as he was constantly

interrupting and seemed very aggressive at various moments. tim kaine succeeded in that he was able to put pence on defense on many of these things that trump has said or done in the past. was not willing to defend certain things that trump has said whether it was his attacks on miss universe or john mccain mexico wasrks that sending rapists across the border and even his positions on and his praiseo for vladimir putin in the past. as for pence, his goal was to weaken hillary clinton. he tried to talk about the last seven years as economically subpar for the vast majority of americans and he talked about her foreign-policy record as secretary of state. pence won on style points.

he won overall, even as people did see tim kaine as winning on substance. what constituency really gets impacted by a vice presidential debate that is not already in one camp or another? sahil: that is the $1 million question right now. the vice presidents usually matter? no. the question now is for the trump campaign, for mike pence. last night, what constituencies did mike pence reassure? thatiggest constituency could put an end to him is suburban women -- many worry he doesn't have the right temperament or qualifications to be president.

did mike pence reassure them last night? pence was evenhanded, cool and did not go too far in defending things trump has said and make them believe that their concerns won't be borne out. it's a little early to say. i'm not sure he did a whole lot of good on that front. david: a lesson in contrast. there was a line in your piece that's when donald trump called mike pence, almost immediately, the indiana governor began preparing for this debate. will donald trump take anything from last night's performance and emulate it on monday night? be it for me to try to predict what all trump is going to do. to do what advised mike pence did. he's being pleaded with by

people close to him to be more disciplined and not take the bait on attacks from hillary clinton. one thing he took the bait on -- his advisers are urging him to not do that in the second debate. to be more calm and measured and prepare. he went into all the debates not preparing that much in the republican primary. the attitude, playing the alpha male and taunting and insulting opponents when they come at you worked for him in the republican primary but this is another world. people around him are hoping he becomes more disciplined in the next debate. david: thank you very much, sahil kapur joining us in washington, d.c. has not beencuban

shy about voicing his political preferences this election season. emily chang caught up with cuban at the salesforce dream force conference in san francisco yesterday. mark: hedging some things in goes -- in case trump further. a tailwind hedge, derivatives if the market starts to head down. emily: how would clinton versus trump affect pe growth in general? mark: when you have a president, let's say trump wins and you don't know what he's going to say next, that is the ultimate uncertainty. he hasn't been able to control himself this close to the presidency, he is not going to change. one ridiculous or offensive comments and north korea drops a bomb on japan. one comment about being oblivious about the world and putin invadess --

ukraine. those things rattle everybody. when i said the market would , socialyou were elected unrest is the ultimate uncertainty. if you don't agree with hillary clinton's programs, you go to your senator and you can do with it. if someone is just oblivious to what's going on in the world -- look at charlotte, when they had their unrest, when businesses cannot open, it doesn't matter what the tax structure is. society really takes a turn for the worst. are -- hillary clinton understands about power in the world. she understands the relationship between china and north korea and japan and that whole asian area.

she understands the dynamics of -- putin andudent the surrounding countries. he doesn't. when he was asked about the change in obama's first strike approach, he did not know what he was talking about. that is the scariest thing ever. this has become less about his politics, less about what he is trying to propose as policy -- as president, you make one flippant comment that is offensive to an unstable world leader or contentious world leader, that is all the excuse you need. one bomb dropped on a nato ally, one incursion on a nato ally, we are in a different world. businessperson, i look at probability and risk assessment. is it a greater than 0% chance that trump would say something

stupid as the president that could cause north korea to take action? yes. is it greater than 10% chance based on him tweeting about a beauty queen that gain weight? it might be greater than 76%. that makes them completely unfit. the crazyue about all stuff that's been said about hillary clinton, she is pragmatic come it she is smart, she understands the terrence -- deterrence, she understands what the nuclear triad is. when trump tried to explain cyber, he did not know what he was talking about. in legal and wrong with him taking advantage of -- mark: nothing is wrong with him using net operating loss to carry import. i have as well. saying i'mt there the world's greatest businessmen, i would have been my mistakes.

$915 million loss come i would tell you why. one, i'm a financial engineer and i'm tried to hide it. cared about investing in people and developing jobs, why not say, you know what, i took a big chance. i thought i could create 10,000 jobs. i filled but i learned a lot and you will see the benefit of my knowledge from that failure. there's nobody who's been successful who's never admitted a failure. vonnie: time now for our latest bloomberg business flash. says a quarter of banks operating in developed countries will remain weak. with control some $8.5 trillion in assets will remain

bogged down by low interest rates, higher capital requirements and bad loans. tomorrow, christine lagarde joins tom keene and francine the --ght live from washington francine lacqua live from washington. a report that samsung galaxy note 7 phones exploded on a southwest airlines plane has it happened when the flight was boarding for a trip to baltimore. the phone overheated. the phone has been recalled for overheating batteries. that is your bloomberg business flash update. david: bloomberg is launching bloomberg technology, our newly redesigned website covering technology. go to bloomberg.com/technology. if you go there right

now, you will find an in-depth look at what's going on at twitter. jack dorsey is under increasing pressure to revise growth -- board members are at odds over whether to do a sale or not. investors earliest has been selling shares. i want to bring in sarah frier. what happened in the last 12 months? sara: quite a lot has happened, but not enough to increase the user numbers at twitter. that's what advertisers are looking at. jack dorsey may have come in and helped defined the vision for twitter, but he has not been able to grow it. that has caused increasing concern over the future of the company as it considers some bids. salesforce, google, disney -- his what kristof had to say.

story ofn incredible underachievement, potential that was never realized. i would be excited for someone to go in there and take some chances. >> have you been disappointed with jack's leadership? --i was really hoping to see i think he is the one that's always had the product vision at the company. : some are selling their shares, some have lost confidence in jack dorsey and are not willing to wait to see if there live video strategy can deliver on the results of a growing user base. david: what is going on between the three of them right now?

anthony is the cfo of twitter but might as well have more of an operational strategy role. leaves a lot of the strategy decision-making to the cfo. he made the deal with the nfl to livestream 10 football games on thursday night. it trickles down to a lot of other deals they've been doing in entertainment, politics -- you mentioned evan williams. he's on the board. he is one of the board members who favors the sale while jack dorsey is not so excited about the idea. he wants time to prove this live streaming strategy can thrive and drive growth. vonnie: is it time for twitter to sell? sarah: it is definitely

something they are taking seriously now. jack dorsey would say they want to prove what will happen with the streaming deals. met once getting anxious and the board has brought in goldman sachs to pursue a sale seriously. vonnie: you can get more of that bloombergr on on technology with emily chang. david: the president is scheduled to deliver a statement on the paris climate agreement at 3:30 p.m.. this is bloomberg. ♪

>> it is 3:00 p.m. in new york. i'm vonnie quinn. david: welcome to bloomberg markets. ♪

david: we're live from bloomberg's world headquarters in new york for the next hour. we have that two big economic reports. private payrolls cooled. a new acquisition path focusing on media companies. what is next on at&t's's agenda? , a multimillion dollar fine looms. the bank should fight back, more later in the hour. we will check on the markets an hour before the close. a pretty steady rise as we had an early day lift and stocks have stayed there. helped in part by stronger than estimated economic data this morning on service industries as

well as factory and durable goods orders. all of that is helping to power the major averages higher. and financials are the two best-performing groups. energy at 1.8%. we have the rotation into them and out of the interest rate sensitive groups. telecom come utilities, consumer staples are climbing today p rolled and that some of the gains of the s&p 500. energy andmove and oil prices, data once again showing a drawdown for the fifth straight week. analysts had estimated a gain in inventories. we had a drop in hurricane matthew is bearing down, coming through the caribbean, bearing down on the coast of florida. is raising concerns about whether there will be shutdowns for example. exxon mobil and chev want -- chevron all rising as oil nears

$50 per barrel. interest-rate sensitive groups. look at the 10 year note today. 1.72% is helping things like banks and hurting others like real estate stocks. on an individual basis, this contractor had fired an employee for allegedly leaking classified information. he was a contractor at the national security agency. shares down by 3%, a bounce off the bottom after it was a comment that said we have indeed fired the employee. are also continuing to watch the evolving and developing situation with twitter. the wall street journal saying today that the company may get bids as soon as this week. one of the bidders that has been

most frequently mentioned, salesforce.com, the name the journal mentioned again today even as analyst say they are not positive on that combination necessarily. salesforce shares have been falling today and they paired some of their declines. here andbit of leg up shares still down by 5%. the deal issaying universally not light on the part of analysts and investors. vonnie: thanks. that is julie hyman at the market desk. headlines on the first alert news. president obama will deliver a statement at the rose garden and will discuss the paris climate agreement.

hurricane matthew killed at least 11 people in the caribbean and forecasters say the coast is honorable. the president has the message for residents in florida and the carolinas. obama: this is a serious storm and it is already hit eight -- haiti with a devastating effect and is now the process of moving through the bahamas. pay attention to your local division -- officials. mark: in cuba, police and soldiers have organized people and the storm they are clearing streets and hauling away debris the morning after. three blocks from the edge, blocked by a shipping container, hurled there by a massive wave.

the syrian government says it will reduce the number of air inside and artillery's aleppo according to a state run publication which said the move is to provide a window for civilians to escape to save her zones. early today, the yuan released satellite images from rebel held parts of city. presumably buyer strikes. the council unanimously agreed portugal's prime minister should be the next secretary-general. served as the commissioner for refugees until last december. the council will meet thursday morning to formally approve and recommend his candidacy to the 100 member general assembly which much -- must give final approval. the highest court rejected three nuclear disarmament cases. overcked jurisdiction cases against britain, india,

and pakistan. the nation originally filed cases against nations including the u.s. but only three cases got to preliminary proceedings. powered by more than 2600 journalists and analysts in one of 120 countries. this is bloomberg. david: more numbers on the u.s. economy. a fresh look at the health of the nation's economy. a rebound last month, hitting the highest in nearly a year. deficit,s. trade widened to 44.7 billion dollars, slightly greater than estimated. the joss report friday, adp is out with a friday payrolls report. joining us now is carl, chief bloombergmist for intelligence, just back from boston, massachusetts. less -- let me ask you, that was a real surprise.

-- a was perfect surprisingly weak in the preceding months and then a rebound today. a three month moving average gives us a better sense of what and that is telling us the economy is doing better in the second half and the first half of the year. by no means is it off to the races p or we will see gdp growth in the 2% territory and a lot of analysts started the corner looking for 3% plus gdp gains. the stock of economic data is quite good but the slow wasn't. the point about it is generally, the economy is in healthy shape. >> the first half was lousy, growth averaged basically 1%, and extremely slow pace that rate ofat a greater

overheating. economists say they are proving in a second half but i think it is happening to a much more moderate degree than what a lot of folks are anticipating. david: you cannot go to a major -- pitcher city or a small town askedt hearing from them, her what she is saying, let's take a listen. ike -- i thought the case was compelling. , as wedata come in anticipate, consistent with my forecast over the median run, i expect the case would remain compelling but we will look at all the data that comes in between now and november. still going to look at the data as it comes in. how representative are those comments? >> i do nothing she is at the

center of the committee but i do not think she is too far off from the center. the fed it slowly shifting into perhaps not fast enough for -- for some of the voting members on the committee. the meeting is less than a week ahead of the presidential election. i do not think the president wants to step into a political fray. probably again in november and then she will get what she at the the rate increase december meeting. intoe: but they could step the fray because they do not have to worry about that. that was one of their points. they have to be sensitive to raising rates days before the election. potentially risking a market swing which could at the margin potentially influence voter sentiment. they do not want to be right there stepping in with something new just ahead of the election.

if the economy is strong enough to handle it in december, certainly it can -- they just want to wait for a little more information. waiting from november to december, you get another jobs report any retail sales report and a little more confirmation that we are easing away from the precipice of the exclude -- extremely slow performance in the forecast. cheesy -- chief economist looks for growth yesterday and politics are very much front and center here. what did you make question mark >> they're looking for 2016 growth, 3.1 percent, normally 3% is global recession speed. it shows you how close we are to the brink. year, about 3/10 or so. it is based on the expectations that we could see a bit more fiscal stimulus, hoping to lift economies. as wes most important

consider the fragility of the is the fact that we look across the developed economies and we see unemployment rates have come down considerably. in the u.s., it has come down from 10% at the end of the great recession to less then 5% now. it is true in the u.k. and spain and greece as well. lower unemployment makes economies much more resilient to economic shocks. for that reason, it will be a consumer lead story in the u.s. and abroad as well. foruts us on a trajectory 2017. david: thank you. coming up, at&t has given a strong performance and chairs are up more than 30%. now is the time to extend media properties? a quick data check now.

up to and a quarter percent today, a two year yield better than expected, up to 84 basis points now. 1.7%, year yield is at back up to 86 basis point. we look at the dollar index, not doing as much today but still 96.1. this is bloomberg. ♪

vonnie: this is bloomberg markets. time now for a look at the biggest business stories in the news right now. we start with the supreme court today.

on insider trading. the argument is whether someone is sent to prison for making trades when the insider who provided this is not looking to make any money. a willingness to a poll of the conviction and if they rule that way, you can make it easy to profit. president clinton can pay and not -- $90 million -- attracted to private bank. the fourth quarter of 2011 into to meet sales targets. a rosier picture of the bank for investors. banksone quarter of the operating will remain weak. the organization says the bank capital requirements and bad loans. , livesaging director from washington, that conversation begins at 9:30 a.m. wall street time. bloomberg television, and online. that is your update. vonnie: at&t wants to go to

hollywood. and, ant powerhouse multibillion-dollar media company from central acquisitions. smiley with lance, people say at&t will look at deals for the next three to five years. joining us now is paul of bloomberg news. thank you for joining us. it is not out of this world, right? it seems like content and distribution might be the future of everything cable, satellite, -- providers paul: right. some might say at&t is too late to the party. verizon has gotten into content media. comcast required nbc a few years ago and at&t is really waking up that i can no longer be --

>> you look at verizon, it seems like it's focus is trained heavily on advertising. why is at&t taking this tact? >> it sees a real strong in the comcast playbook distribute their own shows. as they look at their business in a tough race with t-mobile they also have to face losing video subscribers as well. they would like to plug in their own content to the web streaming

service that launches later this year. funny: it seems unfair giving themselves the headache of how come -- of having competitors and more and more fields. will beaol, they competing with people in various different landscapes. that?ey do do they have the knowledge base? >> absolutely. ours literally grandfather's phone company and they still are at heart a phone company. one thing people criticize comcast for when comcast art nbc universal is how do these cable guys from philadelphia make nbc universal successful? they really do have to take a cue from the media people. they have already partnered with peter sherman.

there are certainly strong signals that they will defer to the experts in the fields. david: there is a wonderful image today, looking at 40 or 45 companies that he might he interested in. there are certainly strong what doing know about what kinds of companies they are looking at? at&tat we heard is that might be looking to make an acquisition to 50 billion, and that is a big range of companies . might be like disney out of the question but there are a handful of smaller companies, abc networks, discovery, script might be a possibility. a joint venture between viacom at&taramount pictures, made a bid, a strong approach to buy stars and they looked at other options. they looked at paramount and some analysts are saying time warner might be on the table as well, which owns is to -- hbo.

it will be interesting to we will talk to you again. our thanks. david: ahead, we are looking at insight.tions will things turnaround of the crucial fourth quarter? this is bloomberg. ♪

vonnie: time now for options insight. julie hyman is back. julie: joining me today from km holdings, we have been talking about a return to volatility that you have been looking at patterns of what happened at presidential election years to volatility. i imagine every election is different but what are similarities and patterns we have seen? election, forthe

many of us, it is only about a month alert -- a month away. take a look at realize volatility going back to 1984. we looked at years with election years and without elections and 30 day realize volatility of the s&p 500 and what it looks like hear an awfule lot is seasonal volatility. it is not easy to isolate presidential election years for us as regular years because of the seasonal volatility. what you see is realized volatility tends to be a little lower in mid-september and does make a steady climb right through the election day in early november and peek out in mid-november and then come off from there. the fact that realized and implied volatility is as low as it is suggests we could see some upside over the next several weeks into and through the election in early november.

>> i know this is the stock you want to talk about, twitter and salesforce, opposite directions, sales worse in particular having quite a tumble on the headlines it might be one of the lead contenders for twitter. what kind of opportunities are you seeing in this particular case? >> you can use the twitter option activity for concern of the market expectation, the bid will eventually come. 20 51 by two ratio call spreads here expecting it , twitter toprobably trade 25, earlier trades last week, 20 to 30 call spreads that break even around 2440 and it has moved up. 27, 45 and 26y call spreads trading, so we have watched expectations of where

this will come. >> finally, we have been talking about retail today. we will get same-store sales numbers from retailers tomorrow. it sounds like you are not optimistic judging from the trade you are looking at. >> right here we're focused on two things. slow store traffic, which may be this is victoria's secret and bath and body works really. promotional activity. that could be more indicative of retail as we move deeper into the earnings season which begins to ramp in about a week. same-store sales tomorrow morning. if the excessive promotional activity has to meet the same-store sales, as quickly as possible, it hits the margins, they will have to guide down third-quarter earnings.

we want to go out to november and initiate outright shorts. 67.5, 60 foot spreads. fell 75 on, turnaround, call up your you're committed to getting out of the stock almost 7% higher than you got a projection from 67.5 down. julie: all right. cool. thank you, jim. back to you guys. david: thank you. i want to flag the guest on the air tomorrow. from the headquarters in washington at 9:30 a.m. eastern time. this is bloomberg. ♪

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the united nations elected the council first it wanted to succeed as leader of the world body. today, the clear favorite, antonio. we have decided to go for a formal vote tomorrow morning. we hope it can be done by acclamation. the former prime minister of portugal. until december, he served as the commissioner for refugees. assemblyember general must approve today's security council vote. republican vice presidential nominee mike pence is back on the campaign trail less than .4 hours after his debate with tim kaine. he held a rally in virginia. mr. pence: a lot of talks about

taxes overnight. my counterpart talk -- sounded like a broken record. know that texas is simple. hillary clinton will raise your taxes and donald trump and i will cut tax across the board. texas is simple. hillary clinton will raise your taxes and donald trump and i will cut tax across the board. mark: governor pence won a bipartisan praise for common collective performance but tim kaine is claiming mission accomplished for forcing pence to confront donald trump's long list of evocative and remarks. hillary clinton is off the campaign chair preparing for the second campaign debate at home in washington. the campaign chairman told reporters that the town hall setting for sunday's meeting in st. louis is a natural format for her. that is a format that donald trump is not used to. trump has maintained a full campaign strip -- schedule that he is participating in an event tomorrow in new hampshire. it is the most specific yet of what the u.k. will demand in brexit negotiations.

of prime minister's government solutionsout paying to the budget to allow british companies access to the market. the spokesman also says there will be no compromise on immigration, lawmaking, and freedom from the jurisdiction. global news 24 hours a day powered by more than twice a country journalists and analysts in over 120 countries. this is bloomberg. the paris climate agreement. you can follow his remarks on a bloomberg at live go. a historic day and a turning point for discussions on the environment and we will keep you posted on any other headlines. while some asset classes have been up and back down today, these remained fairly steadily in the green. the dow jones gaining more than 100 points, up half of 1% as is

the nasdaq. abigail doolittle is standing by to tell us about the action. abigail: we have had a nice rebound rally for the nasdaq today. apatheticlittle considering much of the strengths of a has to do with a snapback, but nonetheless, right the nasdaq is up half of 1% in racing the today decline. a fundamental catalyst, shares are on pace for their best finish, moving higher for about three months initiated on broadcom with a new outperform. the acquisition is a game changer. lot ofks there are a more than 20% --

20% upside on shares. earlier this year, the stock .ent down but this year it is a we could see big gains into the end of the year. speaking of one of the biggest turnaround this year, amazon is trading at a record high. amazon was down 30% of the. all of the stuff, the company reportednice quarterly april raising their price targets, some above $5,000. today is no exception. the price target raised 29 $2000. basically saying they are positive on the e-commerce edition. bullish on amazon, 90% of the analysts say to buy shares of amazon.

mark: they were looking for a pullback. >> a chart we showed two weeks ago suggested there could be a pullback and clearly with the stock at record highs, that interpretation is wrong. theron, 3735, it shows a beautiful uptrend out of the strong report back in april. a few weeks ago, the uptrend started to reverse when amazon fell below what is typically bearish -- typically nine times it is actually upside being bullish, however, amazon is still below the uptrend,

chasing to where it was before, suggesting we may see a pullback , probably having to do a lot with upcoming quarter. expectations are going high. high here andtty it will be interesting to see what comes out of the third .rder matt: cool. doolittle. >> slow and steady growth. we are over seven years in the recovery doolittle and our nexts asking how much longer this will last. senior equity strategist and bank of america merrill lynch. thank you for joining us. for years people have been asking how much longer it can last, when we're talking about the stock market and the economic recovery. >> i am not an economist or a technical strategist. we did a simple exercise.

we picked a few favorite in the -- indicators to just get a sense, if the recent trend continued at the start of the recession in general, the range was pretty why. it points to a recession maybe late next year, probably earlier when a lot of people were expecting. >> what are the indicators flashing yellow in your view? >> pretty much everything we sales, theok at auto strength of the economy, we are barely above 0% now. on year basis, the payroll report on friday, slow growth, probably the slowest you have seen in three or four years. what we are looking at for this curvese is the -- yield .2 2000 and claim -- 2018, which

leads overall job growth. steady decline. if you believe it is a trend. scarlet: a yield curve has richly been the session. how reliable of an indicator is we are in the extramarital environment when central banks are directly controlling the short and long and? >> it is a valid argument and i could rattle off a list of other reasons it may not be as the funny thing is people go through every cycle and say the same thing. it is different and it will not work this time. that is exactly the type of thing people were saying in 2000 seven. i take it for what it is. that prior tonce

the 1960's, it was not a great signals well. matt: do you expect other bear markets to come? a sense trying to get and frame that conversation. about areart thinking it positioned to accept that is difficult to pinpoint when it will start. it's almost time sounds like a long time but it is not that long. if you sell to early, you're better off staying in the market. returns are typically very strong. the lastrst returns in year going back to the 1920's, 30%.

on average, it is more than 50%. it is more painful than the bear market. joe: i want to go to bloomberg and pull the chart that is getting attention. i misspelled discretionary. starting totaff break down and people are piling more into the cyclical stocks that do well in the economic recovery. of people talking about this. what do you make of it? >> we are still big fans of the quality trade. not big fans of the low data trade. there is a big push into low volatility stocks. whate extent that is you're talking about, i think it is crowded. lessally defensive and cyclical areas of the economy are trading cheaply right now.

my favorite example would be health care. it does not really trade -- because of all the regulatory pressures and negative headlines, it is trading at a discount despite the fact it is fundamentals -- >> you noted they are increasing our to equity but increasing while doing it. >> yes. what you found is if you break down the acid allocation data -- asset allocation data, but pretty high levels of allocation , you can see where basically at the 2007 levels and not too far off from where you saw in the tech double. if you look at the allocation, we found it is probably a function more of the fact that stocks have tripled more than anything else. it is not a sign of people rotating. it is a set it and forget it type of philosophy. up, wellsoming

fargo's's of the scandal was called the most stupid mistake in the world. plus, why deutsche bank shouldn't just settle with the department of justice. this is bloomberg. ♪

scarlet: this is bloomberg markets. what led toial says the evacuation of a plane and an international airport was caused by a galaxy note 7 phone. it happened when a flight was in louisville on a trip to baltimore. investigators confirmed the galaxy note 7 has been recalled. another step taken today, could be a giant boost.

the company conducted a safety test for cooler passengers away from the rocket in an emergency. 250-300,000 dollars. that is your update. matt: deutsche bank should fight the boj and court rather than pay the u.s. orton billion dollars to settle the residential mortgage-backed security's investigation. that is according to allegan's investment ceo. >> deutsche bank in my view they do not need capital. and between 4 billion

and $5 billion. the foreign premium, for new -- state, >> he really think foreign premium should get a slide? >> absolutely. totally outside proportion. doj, they should litigate. >> hang on a second -- >> we are asking apple to pay 12%. it is a fine equivalent between $4 billion and $5 billion. >> you are saying, let me just

get this straight, that he shakes -- raises middle finger at the justice department and say, i will see you in court. >> yes. >> really? >> yes. have they not taken the option? >> you can always walk out. litigate.eady to eventually, in the next 60 days, it is an everybody's west interest to settle. shouldhat prosecutors put this in the case? >> dutch bank has a powerful argument.

they do not need the u.s. and the u.s. does not need them. is not what they said. >> of course. but the reality is -- >> he also says the largest in the world is that u.s. market. >> of course. that theately, so high >>titution long-term, .uppose they take it to court they still oh the money. they do not get to say ok fine, that is not an option. agree. right now, we do not have the details. why? nobody knows. cases, that is why

the market is puzzled. if you were to go to litigation, that would all become public. boj would be the scrutinized. about wellsto talk fargo. where does it end? >> i think this has to be the most stupid mistake ever made. >> in the history of banking? >> yes. for a simple reason. rank in the top 2% in the world. the bank profit is less than $2.6 million.

if you had to do something dodgy, do not do it for $2.6 million. they were fined 180 and they lost 80 times. the market cap went down 1300 times more. for the bankistake committee hearing, they should have gone there and they did it eventually in the financial services committee where they -- cut for the head ceo. had they done at the first time, i think the case would have settled. a huge arrogance on a democrat they do not where say, i'm sorry, a big mistake. thinkp with the ceo, i

they should have offered in the first place -- secondly, this is the pullback to senior management. scarlet: coming up, why is spending in the lowell? what it could suggest. this is bloomberg. ♪

scarlet: this is bloomberg markets. -- we're looking at private investment and that is the white line. you will see most recently, it backbit of a -- this goes -- goes back 20 years.

both tend to decline before recessions. it happens in the months before the 2001 recession. to 2016 and forward equipment spending is on the downturn and there is a huge to virgins. the question is what happens next. matt: or this is private investment. borrow onee to chilean dollars, that could make the lack of private investment. another thing people are talking about is the rise in the price of oil. i have got one of the reason spear this chart goes back to the beginning of the white line total inventory from the department of energy the strategic petroleum reserve.

five weeks, it has been in a real downfall and this of hurricaned matthew, coming up along the coast of cuba, florida, there are takers in the path which scarlet showed, oil platforms in its path. the inventories can fall even lower and that would push the price of oil even higher. commodity isbig gold, slammed the past three days. this chart comes from bloomberg intelligence chief economist mike, showing the relationship between 10 year rates on the bottom and cold prices, it is pretty straightforward that gold lately has been a function of long-term rates and when rates cold goes lower and vice versa. it is a tight relationship we can see their.

the economy, economic data has been better and expectations of a tighter central-bank policy pushing of longer-term rates. gold prices lately have been totally getting crushed. matt: one of the coolest charts i have ever seen. big props. go on the bloomberg if you want to see a lot more research like that. what did you miss on the market close our next to take a look at the major averages with four minutes to go before the closure. looking at gains across the board. 110 points for the dow. s&p 500 gaining nine points and the nasdaq up by .5%. this is bloomberg. ♪

♪ scarlet: we are moments away

from the closing bell, stocks falling at a two week high. matt: i am matt miller. joe: i am joe weisenthal. scarlet: ims girl scarlet fu. oil supplies declined for a fifth straight week. joe: "what'd you miss?"? scarlet: earnings in just moments. closeill deutsche bank's cast a shadow in washington? they say the bank will be able to pay the dead bills. indiana governor succeeds without really trying to defend his running mate donald trump. we look what is next for both campaigns. we begin with the market minute, s&p 500 rising